World’s Fastest T+0 Stock Settlement Begins in India

World’s Fastest T+0 Stock Settlement Begins in India

The Securities and Exchange Board of India (SEBI) has implemented a framework to introduce the beta version of the T+0 trade settlement cycle. The Bombay Stock Exchange (BSE) has announced a list of 25 stocks eligible for the T+0 settlement cycle starting from March 28. Among the eligible stocks are Ambuja Cements, Ashok Leyland, Bajaj Auto, Bank of Baroda, BPCL, Cipla, as well as three Tata Group stocks.

Presently, the Indian markets follow a T+1 settlement cycle, where transactions reflect in investors’ demat accounts one day after the trade. However, SEBI has introduced a framework for the optional T+0 settlement cycle, initially available for a limited set of 25 stocks and with a restricted number of brokers.

The T+0 settlement cycle will run concurrently with the existing T+1 cycle in the equity cash market. SEBI believes that a shorter settlement cycle will enhance cost efficiency, reduce processing time, provide transparency, and strengthen risk management for investors. Previously, SEBI had reduced the settlement cycle to T+3 from T+5 in 2002 and further to T+2 in 2003.

All investors can participate in the T+0 settlement cycle if they meet the prescribed timelines, processes, and risk criteria. Trading will occur between 9:15 am and 1:30 pm, with prices in the T+0 segment operating within a price band of +100 basis points from the regular T+1 market prices. However, T+0 prices will not be factored into index calculations or settlement price computations.

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